“The U.S. economy will inevitably slow at some point and the Fed will cut interest rates. At that point, Robinhood will have two choices: Lower the 3 percent rate on its checking-and-savings product, or invest in riskier securities to maintain above-market interest.” It’d be interesting to see what they’d do.
They’ll be purchased well before that happens.
@Citi Maybe that’s the play. Desperate for cash.
👎
3% seems pretty high
Robinhood is trying to confuse millennials with the concept of saving/checking and low-interest bond. They don’t realize the risk behind 3% APY is not equal to the other saving accounts which has 2% APY.
What is the risk? What does it mean to be not FDIC insured?
The APY of 10-year US treasury is just 3%. If Robinhood is trying to make profits on this saving/checking, they will at least invest the money to some higher risk bond than US treasury. For me, if I want a saving account, safety is more important than APY, which means FDIC make it risk-free.